There’s a reason homeownership is still considered the American Dream. A home is a place to create memories, a means for building wealth, and a pathway to strength and stability in the communities we all call home.
Roughly 72 percent of California homeowners here have a mortgage, and 4,279,210 claimed a deduction for mortgage interest. The grand total tax savings being $13,140,721,000 in deductions.
Here in Santa Barbara, things are no different, and that is something for lawmakers to remember as Congress embarks on an effort toward comprehensive tax reform.
Middle-class families have built wealth for centuries through homeownership and real estate investment. Homeownership allows families to protect themselves against rising rents and inflation, while offering an opportunity to build equity over time.
Let’s face it, most families can’t get a loan to purchase stocks or invest in a mutual fund, but they can get a safe mortgage product at competitive rates to invest in a home. It’s a tremendous mechanism for building wealth that shouldn’t be taken away.
Best of all, homeowners aren’t the only ones who benefit. For every two homes sold, a job is created. In all, home sales support an average of more than 2.5 million private-sector jobs every year.
At $3 trillion, real estate accounts for more than 16 percent of the U.S. gross domestic product.
That is a big part of why, for more than a century, the American tax code has incentivized homeowners. The country’s leaders acknowledge that a strong, stable housing market is good for everyone, which is why it deserves support.
Important tax incentives such as the mortgage interest deduction and the state and local tax deduction are a part of the tax code to ensure all creditworthy families have a fighting chance at the American Dream.
If those incentives went away, homebuyers would see their dream pushed further out of reach, while current homeowners would have the welcome mat pulled right out from under them.
As Congress continues working through this process, the incentives that put homeownership within reach for millions of Americans deserve full-throated support from both sides of the aisle.
— David Kim is a licensed real estate broker with Village Properties and the 2017 president of the Santa Barbara Association of Realtors. Contact him at david@villagesite.com or 805-296-0662. The opinions expressed are his own.